SINGAPORE: Parliament on Tuesday (Jan 7) passed a new law providing the police with powers to order banks to restrict the banking transactions of potential scam victims.
The Protection from Scams Bill comes as scams remain a “grave concern” in Singapore, said Minister of State for Home Affairs and for Social and Family Development Sun Xueling as she tabled the Bill for a second reading.
“This Bill allows the police to act decisively and close a gap in our arsenal against scammers.”
The Bill will allow specified officers, including those from the police and Commercial Affairs Department, to issue restriction orders to banks if there is reasonable belief that account holders will be making transfers to scammers.
These restriction orders will suspend money transfers, the use of ATM facilities and all credit facilities, although individuals will still be provided access to their monies for daily living expenses.
“The intent is to buy the police more time to engage and convince the individual that he is being scammed, including through enlisting the help of his family members”, Ms Sun told the House.
She added that the restriction orders will involve the seven Domestic Systemically Important Banks (DSIBs) - DBS, OCBC, UOB, Citibank, HSBC, Maybank and Standard Chartered Bank — which account for the vast majority of consumer bank accounts in Singapore.
The orders can also be issued to non-DSIB banks if there is reason to believe that victims will make transfers to scammers.
Ms Sun said the Ministry of Home Affairs (MHA) is “mindful of the need to strike a balance between protecting an individual from further harm and not unduly inconveniencing him”.
Several safeguards are in place, such as requiring restriction orders be issued only “as a last resort if all other efforts to convince the individual have failed”.
Individuals can also appeal to the Commissioner of Police against the restriction orders - a process that MHA will ensure is expeditious, Ms Sun added.
The Bill will limit the duration of a restriction order to “a maximum of 30 days at the outset”. Each order may be extended up to five times if the officer deems it necessary.
After five extensions, the restriction order “must lapse … even if the victim is still at risk of transferring more money to the scammer”, said Ms Sun.
“MHA takes a practical approach to this. We cannot handhold the victim indefinitely, nor do we have the resources to do so.”
Preliminary indicators suggest that the number of scam cases and losses rose by about 10 per cent and 40 per cent respectively in 2024, compared with the previous year.
Specifically, there remains “a high number of scams involving self-effected transfers”, which involve the voluntary transfer of monies by the victim to the scammers, Ms Sun said.
These scams, which include government officials impersonation scams, investment scams and internet love scams, accounted for 86 per cent of all scam reports and 94 per cent of losses from January to September last year.
“In some cases, the police have observed that the victims were so taken in by the scammers’ deceit that they refused to believe that they were being scammed, despite being repeatedly advised by family, friends, their bank and even the police,” said Ms Sun.
Currently, the police and the banks have no legal powers to stop scam victims from making transactions.
“The victim would continue to lose more money to the scammers until he is eventually convinced that he is being scammed. In some of these cases, the victims have appealed to the government for financial assistance,” Ms Sun said.
“In such situations, the authorities should have powers to intervene decisively.”
The Bill was passed unanimously, but Members of Parliament (MPs) raised various concerns.
Mr Yip Hon Weng (PAP-Yio Chu Kang) said while the Bill is a necessary and timely step to address the scam crisis, it is also “highly intrusive” because it “removes personal agency” by restricting access to accounts.
“Temporarily freezing someone’s account is a serious measure. It should only be justified by the need to protect vulnerable individuals,” he said, adding that banks must prioritise training and resources to minimise errors in account restrictions.
While there is more work to be done to protect consumers, there are reasons to “have reservations” about the Bill, said Associate Professor Jamus Lim (WP-Sengkang).
Calling for more flexibility in how the laws may be applied, he asked if it would be possible for banks to offer individuals the right to designate a trusted administrator, such as a close friend or relative, the full authority to freeze transactions for up to 30 days, instead of the police.
This would be an extension of the existing “money lock” feature, allowing individuals to designate a third party as an authorised person with the ability to corroborate a genuine withdrawal attempt, said Assoc Prof Lim.
Non-constituency MP Hazel Poa suggested introducing an opt-out provision for individuals, subject to safeguards.
For example, the opting out of restriction orders could take effect only after 30 days, and individuals would have to opt out in person after a mandatory counselling session, the Progress Singapore Party secretary-general added.
A restriction order may risk pushing “emotionally invested” victims to desperation, said Ms Poa.
Scam victims should be counselled by a social worker and provided mental health support, and these social workers could help the police decide if a restriction order would benefit the victim, she added.
Ms Poa also asked if the restriction orders will be extended to joint accounts, which may inconvenience account holders who are not subject to the orders.
In her reply, Ms Sun noted that there are two types of joint accounts - a joint-all account where all account holders must give instructions for banking transactions; and a joint-alternate account where transactions can be performed without the consent of the other account holder.
MHA “would prefer to take a risk-calibrated approach” by imposing restriction orders on only joint-alternate accounts but was informed by banks that this was “operationally challenging”.
“Hence we have decided to impose the restriction orders on both types of joint accounts for a start,” Ms Sun said.
While this is “not ideal”, she noted that the authorities have decided to go ahead with this move to “provide victims with the necessary protection”.
MHA will work with the banks to explore putting technical solutions in place “to facilitate such exemptions” in the future, she added.
Ms Sun also addressed the suggestion to offer an option to opt out, reiterating that the restriction order is a measure of “last resort”.
The restriction order will only be issued temporarily for a maximum of 30 days, and extended up to five times if necessary, she noted.
MPs, such as Mr Gerald Giam (WP-Aljunied), Ms Ng Ling Ling (PAP-Ang Mo Kio) and Mr Sharael Taha (PAP-Pasir Ris-Punggol), asked if the legislation is enough to address scam tactics that are evolving and being conducted at high speeds.
Ms Ng also noted the risk of scams being done on non-banking platforms and asked if the restriction orders could be expanded to include the likes of cryptocurrency exchanges and remittance companies.
Ms Sun replied that MHA recognised the risk that other platforms serve as “intermediaries in the scam chain”. It will continue to work with the Monetary Authority of Singapore to monitor the scam situation and “consider expanding the scope of the restriction order in the future, if necessary”.
Ms Sun also said the police expect to issue five to 10 restriction orders each month, although the actual number will depend on the cases that are brought to the police’s attention and the assessment of each case.
Mr Giam noted that this will come up to about 60 to 120 restriction orders being issued a year, which is “negligible” compared to the 50,000 scam cases reported annually. He asked if this means that the Bill will have a limited impact on combating scams.
Ms Sun reiterated that the Bill alone “will not significantly dent the total number of scams” and it is only one of the many methods being deployed to combat scams.
That said, it targets scams that involve social engineering and can lead to “quite large amounts of losses” over time.
“So, while the number of scams that could be deterred through this Bill … is (expected) to be between five to 10 cases a month, I think we should not neglect the fact that the absolute amounts (in terms of) losses could be substantial,” said Ms Sun.
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The Protection from Scams Bill comes as scams remain a “grave concern” in Singapore, said Minister of State for Home Affairs and for Social and Family Development Sun Xueling as she tabled the Bill for a second reading.
“This Bill allows the police to act decisively and close a gap in our arsenal against scammers.”
WHAT THE BILL IS ABOUT
The Bill will allow specified officers, including those from the police and Commercial Affairs Department, to issue restriction orders to banks if there is reasonable belief that account holders will be making transfers to scammers.
These restriction orders will suspend money transfers, the use of ATM facilities and all credit facilities, although individuals will still be provided access to their monies for daily living expenses.
“The intent is to buy the police more time to engage and convince the individual that he is being scammed, including through enlisting the help of his family members”, Ms Sun told the House.
She added that the restriction orders will involve the seven Domestic Systemically Important Banks (DSIBs) - DBS, OCBC, UOB, Citibank, HSBC, Maybank and Standard Chartered Bank — which account for the vast majority of consumer bank accounts in Singapore.
The orders can also be issued to non-DSIB banks if there is reason to believe that victims will make transfers to scammers.
Ms Sun said the Ministry of Home Affairs (MHA) is “mindful of the need to strike a balance between protecting an individual from further harm and not unduly inconveniencing him”.
Several safeguards are in place, such as requiring restriction orders be issued only “as a last resort if all other efforts to convince the individual have failed”.
Individuals can also appeal to the Commissioner of Police against the restriction orders - a process that MHA will ensure is expeditious, Ms Sun added.
The Bill will limit the duration of a restriction order to “a maximum of 30 days at the outset”. Each order may be extended up to five times if the officer deems it necessary.
After five extensions, the restriction order “must lapse … even if the victim is still at risk of transferring more money to the scammer”, said Ms Sun.
“MHA takes a practical approach to this. We cannot handhold the victim indefinitely, nor do we have the resources to do so.”
Related:
WHY IT MATTERS
Preliminary indicators suggest that the number of scam cases and losses rose by about 10 per cent and 40 per cent respectively in 2024, compared with the previous year.
Specifically, there remains “a high number of scams involving self-effected transfers”, which involve the voluntary transfer of monies by the victim to the scammers, Ms Sun said.
These scams, which include government officials impersonation scams, investment scams and internet love scams, accounted for 86 per cent of all scam reports and 94 per cent of losses from January to September last year.
“In some cases, the police have observed that the victims were so taken in by the scammers’ deceit that they refused to believe that they were being scammed, despite being repeatedly advised by family, friends, their bank and even the police,” said Ms Sun.
Currently, the police and the banks have no legal powers to stop scam victims from making transactions.
“The victim would continue to lose more money to the scammers until he is eventually convinced that he is being scammed. In some of these cases, the victims have appealed to the government for financial assistance,” Ms Sun said.
“In such situations, the authorities should have powers to intervene decisively.”
WHAT MEMBERS OF PARLIAMENT SAID
The Bill was passed unanimously, but Members of Parliament (MPs) raised various concerns.
Mr Yip Hon Weng (PAP-Yio Chu Kang) said while the Bill is a necessary and timely step to address the scam crisis, it is also “highly intrusive” because it “removes personal agency” by restricting access to accounts.
“Temporarily freezing someone’s account is a serious measure. It should only be justified by the need to protect vulnerable individuals,” he said, adding that banks must prioritise training and resources to minimise errors in account restrictions.
While there is more work to be done to protect consumers, there are reasons to “have reservations” about the Bill, said Associate Professor Jamus Lim (WP-Sengkang).
Calling for more flexibility in how the laws may be applied, he asked if it would be possible for banks to offer individuals the right to designate a trusted administrator, such as a close friend or relative, the full authority to freeze transactions for up to 30 days, instead of the police.
This would be an extension of the existing “money lock” feature, allowing individuals to designate a third party as an authorised person with the ability to corroborate a genuine withdrawal attempt, said Assoc Prof Lim.
Related:
Non-constituency MP Hazel Poa suggested introducing an opt-out provision for individuals, subject to safeguards.
For example, the opting out of restriction orders could take effect only after 30 days, and individuals would have to opt out in person after a mandatory counselling session, the Progress Singapore Party secretary-general added.
A restriction order may risk pushing “emotionally invested” victims to desperation, said Ms Poa.
Scam victims should be counselled by a social worker and provided mental health support, and these social workers could help the police decide if a restriction order would benefit the victim, she added.
Ms Poa also asked if the restriction orders will be extended to joint accounts, which may inconvenience account holders who are not subject to the orders.
In her reply, Ms Sun noted that there are two types of joint accounts - a joint-all account where all account holders must give instructions for banking transactions; and a joint-alternate account where transactions can be performed without the consent of the other account holder.
MHA “would prefer to take a risk-calibrated approach” by imposing restriction orders on only joint-alternate accounts but was informed by banks that this was “operationally challenging”.
“Hence we have decided to impose the restriction orders on both types of joint accounts for a start,” Ms Sun said.
While this is “not ideal”, she noted that the authorities have decided to go ahead with this move to “provide victims with the necessary protection”.
MHA will work with the banks to explore putting technical solutions in place “to facilitate such exemptions” in the future, she added.
Ms Sun also addressed the suggestion to offer an option to opt out, reiterating that the restriction order is a measure of “last resort”.
The restriction order will only be issued temporarily for a maximum of 30 days, and extended up to five times if necessary, she noted.
MPs, such as Mr Gerald Giam (WP-Aljunied), Ms Ng Ling Ling (PAP-Ang Mo Kio) and Mr Sharael Taha (PAP-Pasir Ris-Punggol), asked if the legislation is enough to address scam tactics that are evolving and being conducted at high speeds.
Ms Ng also noted the risk of scams being done on non-banking platforms and asked if the restriction orders could be expanded to include the likes of cryptocurrency exchanges and remittance companies.
Ms Sun replied that MHA recognised the risk that other platforms serve as “intermediaries in the scam chain”. It will continue to work with the Monetary Authority of Singapore to monitor the scam situation and “consider expanding the scope of the restriction order in the future, if necessary”.
Ms Sun also said the police expect to issue five to 10 restriction orders each month, although the actual number will depend on the cases that are brought to the police’s attention and the assessment of each case.
Mr Giam noted that this will come up to about 60 to 120 restriction orders being issued a year, which is “negligible” compared to the 50,000 scam cases reported annually. He asked if this means that the Bill will have a limited impact on combating scams.
Ms Sun reiterated that the Bill alone “will not significantly dent the total number of scams” and it is only one of the many methods being deployed to combat scams.
That said, it targets scams that involve social engineering and can lead to “quite large amounts of losses” over time.
“So, while the number of scams that could be deterred through this Bill … is (expected) to be between five to 10 cases a month, I think we should not neglect the fact that the absolute amounts (in terms of) losses could be substantial,” said Ms Sun.
Continue reading...